Chicago has $700,000 ready to lend to small businesses

Gregory Karp
Chicago Tribune
City's microloans lets small business 'not only survive, but thrive.'

An Ethiopian restaurant, a condo property management firm and a vegan catering company in Chicago have one thing in common: Their owners are thankful they got loans to start or expand their businesses when other options failed.

The small loans came through a city program that now has $700,000 more to lend.

On Thursday at Demera Ethiopian Restaurant in Uptown, Mayor Rahm Emanuel talked about the city's Microloan Institute which over the past couple of years has issued more than $1.4 million in loans to 157 businesses via the Women's Business Development Center and Chicago Neighborhood Initiatives Microfinance Group.

By the time business owners seek out the program, they have often already hit up family and friends for loans, Emanuel said.

"It's when you've gone past family — they won't invite you to Thanksgiving. And the banks, they won't talk to you ... and you can see your dreams just within reach," Emanuel said. "The microloan program allows you to bridge to that next level."

As loan repayments are made, the money can be lent again to other small businesses — and sometimes the same ones, for additional expansions.

Tigist Reda, owner of Demera, said she was happy to host the kickoff Thursday to raise awareness about the program because she has been the beneficiary of such programs — four times.

At the start, traditional lenders weren't interested in granting loans to renovate a restaurant less than 2 years old, even though she had substantial equity in the restaurant partly funded by $70,000 in credit card debt.

"I know firsthand how hard it can be for small businesses to find loans, especially when you are a startup," Reda said. "We knew we had good food and a good location — that if we opened it, somehow it would work out."

She ended up getting loans for renovations and hiring, growing from five employees to 17. And she said she has plans for a second location within the next year or two.

"Right now, we are in a good place, I think. We are a successful restaurant," she said.

Sarah Gullette-Johnson, of SGJ Property Management, started her business in 2008 at a kitchen table and has expanded with a $25,000 loan, used to replace a computer server and upgrade her website. "We're better poised now to be the successful company that I always envisioned," she said.

Tsadakeeyah Emmanuel, of Majani Catering, whose first restaurant failed, used his loan to help launch his next venture, a catering business. He plans to open a bricks-and-mortar vegan restaurant in the spring.

Too often, small-business owners think they cannot get loans of $250,000 or less, the city said.

That's why the city started a "Connecting to Cash" series of events aimed at raising awareness that money is available, for microloans of less than $25,000 and medium-size loans of up to $250,000.

In 2012, Emanuel launched the Chicago Microlending Institute with $1 million to help businesses get loans up to $25,000. This year, the city invested an additional $1 million to provide loans to help support about 300 new businesses by 2016 and ensure that the program can be self-funding through 2016.

Besides the $700,000 in microloans available, representatives from the city's Capital Access Center Program will be on hand to work with small businesses seeking loans.

Emanuel said the loan program is part of a larger effort to make it easier for small businesses, which he called the lifeblood of neighborhood economies and job creation in Chicago, to thrive.

Heading into his re-election campaign, Emanuel has worked to position himself as a champion of small-business growth in Chicago — even as the city has increased costs to apply for some business permits and the mayor has put in place higher taxes on cigarettes and tougher tobacco sales rules that small-business owners complain make it tougher for them to compete with neighboring suburbs.

Emanuel has also faced resistance from business groups on his endorsement of a minimum wage increase in Chicago.

Small-business owners can visit the city's Small Business Center at cityofchicago.org/sbc or in room 800 of City Hall, 121 N. LaSalle St., to learn more about access to capital in Chicago.

Tribune reporter John Byrne contributed

gkarp@tribpub.com

Twitter @spendingsmart

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